Sales Management & Distribution

Introduction

The five emerging themes evident in markets today include the following:
1. The connected knowledge economy
where internet enables the companies to mine data and then use the knowledge gained to
develop products and services for consumers.
2. Globalizing, converging, and consolidating industries
Globalization is a key trend in the business world today. The evolution of supply, demand,
and environmental factors is driving companies toward operating as if a homogeneous
worldwide market existed in their industries.
Convergence is a process of gradual boundary loss that results in a binary divide creasing
to exist between two previously discrete areas of activity, industrial process, or technology
application.
This means many technologies, processes and skills will span a wider and wider range of
applications.
Industry consolidation is a situation in which separate companies become one. It is
sometimes described as a merger, although technically these are two different situations.
In a merger, a new business is formed when one company absorbs the other; in a
consolidation, companies join forces on relatively equal terms to form one new company.
3. Fragmenting and frictionless markets
A fragmented market is where no one company can exert enough influence to move the
industry in a particular direction. The market consists of several small to medium-sized
companies that compete with each other and large enterprises.
A frictionless market is a theoretical trading environment where all costs and restraints
associated with transactions are non-existent.
4. Demanding customers
Today, customers are more demanding than ever. They have more power than they used
to. They are smarter and have higher expectations than ever before. This is because,
customers today are educated about what great customer service looks like. Due to
availability of information, they know what kind of products and services are available
worldwide.
5. Adaptive organizations.
An adaptive enterprise (or adaptive organization) is an organization in which the goods or
services demand and supply are matched and synchronized at all times. Such an
organization optimizes the use of its resources (including its information technology
resources), always using only those it needs and paying only for what it uses yet ensuring
that the supply is adequate to meet demand.

In such an environment, one of the challenges for marketing is to take a leadership role in the
successful management of inter-functional interfaces they put forward. The bottom line of any
business is to enhance profits through better sales. This is essentially where the ‘sales
department’ of a company comes into limelight. At the onset of each financial year, the
marketing, the sales, the production, the finance, and the supply chain heads meet to review the
previous year and to set targets for the upcoming one. This activity is fundamentally where the
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 promotional budgets are decided against sales targets.

In most companies, annual sales targets are reviewed each quarter to identify strengths and
weaknesses of marketing strategy. In FMCGs, choices are made between Advertising, BTL and
Trade Offers. Often enough, sales managers and marketing managers have compelling
arguments for advertising and trade incentives. While the finance manager keeps stressing on
‘the bottom line,’ the right mix is agreed upon keeping the category and the intensity of
competition in mind.
The sales function varies in its importance from company to company. In most B2C businesses, it
is the marketing department that takes the lead role, and the sales department provides
support. On the other hand, in most B2B companies, it is the Sales Department that is considered
instrumental in driving company success. The sales department, in such a scenario, is not only
responsible for identifying prospects and closing sales but in some cases is also responsible for
after sales service i.e., customer relationship management. The role of sales department in
today’s competitive environment cannot be overstressed. In an Industrial Goods Company,
where customization is greatly sought, it is the salesperson that is responsible for consultative
selling (co-creation of value). He not only needs to be a master of his product offering but also
must understand the increased diversity in industrial applications.

Marketing & Sales

As mentioned previously, Marketing department performs a key function in most organizations.

Realizing the benefits of focused marketing has compelled a number of pharmaceutical
organizations in Pakistan to separate their marketing and sales functions. Marketing, that used to
be a core function only with MNCs, is today a focal point in most previously sales-oriented
organizations. However, marketers’ success not only depends on their own functional excellence,
but also requires cross-functional process competence to ensure the implementation of
marketing ideas. The sales department is most important in helping marketing achieve its goals.

Some of the factors affecting Sales can be understood with the help of the diagram below:

(Advertising refers to all promotional activities undertaken by the brand such as ATL, BTL, Trade
Offers, POP merchandising, etc.)

Marketing and Sales have invariably been termed as siblings and like any siblings the rivalry
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between the two is also common. Believing in this strategy, a marketer often blames the sales
for not meeting targets. On the other hand, the salespeople often argue that the price was too
high, and the trade incentives were missing. Sales department pushes marketing to define
winning products while Marketing insists on keeping prices up despite pleas for deep discounts.
Sales tend to blame pricing as a sales inhibitor while Marketing tends to counter argue the issue
as a sign of poor salesmanship.

In order to minimize this frequent disagreement, goal congruence is often stressed in most
organizations today. When the two departments jointly agree on the promotion mix with respect
to different products, a better synergy is achieved. Marketing department must contribute to
Sales department by providing:
 Continuous support through ATL and BTL activities
 Coordinating with the Sales for target setting – regular revisions
 Recognition